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Private entrants? The back door’s wide open

Private institutions will be allowed a route to “expansion via the back door”, it has been claimed, after it emerged that they will be able to recruit high-grade students more freely than publicly funded universities in 2014-15.

In that academic year, private providers will for the first time be subject to the same overall cap on student numbers as public institutions, a move confirmed by government guidance released last week, potentially bringing to an end several years of rapid, uncapped growth in the private sector.

Like publicly funded institutions, private providers will be able to recruit an unlimited number of high-grade students from 2014-15, currently defined as those achieving grades ABB at A level.

But unlike state-funded universities, private providers will not have their student number controls reduced as a consequence of their estimated ABB population, potentially giving them a bigger allocation than their publicly funded counterparts.

A publicly funded university with 2,000 students, of which half are ABB, would be allowed to recruit 1,000 students plus as many ABB students as it wishes. But for 2014-15, a private university with the same student profile would be allowed to recruit 2,000 students, with unlimited numbers of ABB students on top of that.

Pam Tatlow, chief executive of the Million+ group of newer universities, said that this meant private providers “are effectively being offered a route to expansion via the back door”.

The system, which will operate only for one year, is being put in place for 2014-15 because there is no accurate record of how many high-grade students attend private providers, it is understood.

The Department for Business, Innovation and Skills has also assumed that private providers attract few ABB students, and thus there is likely to be little extra cost as a result of the policy shift.

However, Nigel Savage, provost of the University of Law, said that about 65 to 70 per cent of his institution’s students had ABB or higher at A level, and he could “of course” calculate this figure in detail for BIS immediately.

“We are looking to grow; we’re a commercial, for-profit organisation,” he said.

The BIS guidance also allows private providers to make a case for extra student numbers if they had made a “significant” financial investment in growth before the plans to cap numbers were introduced.

Carl Lygo, vice-chancellor of BPP University, said that at a recent workshop organised by BIS, all the private providers present were seeking these extra places as they were in a “growth cycle given the newness of the sector”.

He argued that BIS was introducing “hyper-regulation” for private providers and that many smaller colleges would “drop out” of the system as a result.

The number controls would also make UK higher education “less of an attractive target for private equity groups”, he said.

Alison Wride, provost of GSM London, said she was “content” to see a system “that is moving towards a level playing field, albeit that we have some way to go”.

“The opening up of uncapped, high grade student numbers to private providers seems entirely in line with the underlying policy,” she added.

In one important respect, however, publicly funded institutions do have a significant advantage over private providers. Undergraduates at publicly funded universities can access tuition fee loans of up to £9,000 a year, while those at private providers have access to a maximum of only £6,000 a year.